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Treasuries Close Modestly Lower Following Lackluster Session

Treasuries showed a lack of direction over the course of the trading session on Monday before closing modestly lower.

Bond prices moved to the downside in afternoon trading after bouncing back and forth across the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.3 basis points to 2.843 percent.

The lower close by treasuries came as stocks on Wall Street rebounded amid easing concerns about a potential trade war between the U.S. and China.

Treasury Secretary Steven Mnuchin said in an interview on Fox News on Sunday that he is “cautiously hopeful” a trade agreement can be reached.

Mnuchin said that the U.S. would proceed with plans to impose tariffs on Chinese imports but stressed that negotiations are ongoing.

“We’re having very productive conversations with them,” Mnuchin said. “I’m cautiously hopeful we’ll reach an agreement, but if not we are proceeding with these tariffs.”

He added, “We are not putting them on hold unless we have an acceptable agreement that the president signs off on.”

Chinese Premier Li Keqiang also told a conference on Monday that the U.S. and China should maintain negotiations to avoid a trade war.

Trading activity was somewhat subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.